The Goods and Services Tax (GST) Council on Friday decided to slash rates on more than 175 items, reducing taxes on these from the existing 28 percent in one of the biggest tax reductions since the new system kicked-in from July 1.
The council, which is currently meeting in Guwahati, has decided to cut keep only 50 luxury and `sin’ goods like tobacco in the highest slab, paving the way for price cuts in a raft of commonly used goods from furniture to sanitary ware.
Daily use products such as shampoo, chocolates, beauty products and construction items such as marble and granite will cease to be in the 28 percent slab, Bihar Deputy Chief Minister Sushil Modi said today at the sidelines of the 23rd GST Council meeting in Guwahati.
The tax cuts will have a revenue implication of about Rs 20,000 crore.
The council is set to approve sweeping changes including simpler procedures, a single return filing form for small firms and several changes to make composition scheme more attractive.
The GST Council—the apex body for decision making headed by finance minister Arun Jaitley— today in its 23rd meeting in Guwahati will also discuss the proposal to do away with the distinction between air-conditioned (AC) and non-air conditioned restaurants (not under composition scheme) and tax them at 12 percent.
The reduction in rates will be a significant step towards simplification of the GST to support the trader community ahead of the election in Gujarat that will be held in two phases—December 4 and 11. Small and Medium-Sized Enterprises (MSMEs) have been hit by the implementation of the new indirect tax system and crucial steps will be taken to mitigate their challenges.
GST, billed as the country's biggest indirect tax overhaul, has consolidated a dozen of state and central duties into one single levy. All goods and services have been fitted into four broad slab structure –5, 12, 18 and 28 percent—along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.
In the next few hours, the Council is expected to take crucial decisions to make composition scheme more attractive,improve compliance burden and may explore the possibility of including real estate under GST.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
